43
$900,000 was "reimbursement of salaries and compensation paid by
and/or incurred for Pertinax to its employees, including James
Brewer, David Clearman, Joel Munro, and others", petitioners have
pointed to no evidence establishing the purpose of the payment.
Certainly, the circumstances surrounding the substitute invoice
create suspicion. Moreover, petitioners have not provided the
information that would enable us to determine the value of the
services provided by Pertinax--particularly Mr. Munro's
services--to the corporate partners.
Respondent, in her trial memorandum in the Alondra case,
docket No. 10849-91, states that $900,000 of the $906,879
disallowed to Alondra was used for "mgmt. fees (bonuses)".20
This statement strongly suggests that this amount includes the
$500,000 paid as a management fee to Mr. Munro. Even though
petitioners, who bear the burden of disproving respondent's
determination, Rule 142(a), have not even moved to have the trial
memorandum entered into the record,21 we admit respondent's
20The remaining $6,879 is said in that memorandum to have
been paid for "mgmt. services (wages) for Mirror Products".
Mirror Products is not identified in the record, but respondent's
treatment of the amount suggests it is controlled somehow by Mr.
Munro.
21The relevant information in the trial memorandum was
available to both parties. As we stated in Sisson v.
Commissioner, T.C. Memo. 1994-545, the evidentiary rule of
Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165
(1946), affd. on other grounds 162 F.2d 513 (10th Cir. 1947)
(failure of a party to produce evidence in his possession that
might favor his case leads to the presumption that the evidence
(continued...)
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